Snapchat shows ads between stories for two main reasons: to generate revenue for the company, and to keep the service free for users. While some users find ads annoying, they are the tradeoff that allows Snapchat to operate as a free platform.
Generating Revenue
Snapchat is a free app that lets users send disappearing photos, videos, and messages. It costs money for Snapchat to operate the servers, bandwidth, and infrastructure required to handle all that content. Snapchat generates revenue primarily through advertising. By showing ads between stories, Snapchat can make money from brands and advertisers. This revenue helps offset the costs of running the platform.
Snapchat has over 300 million daily active users who view billions of stories per day. All of those views and engagements represent a huge opportunity for advertisers. Snapchat can charge brands to promote their ads in between stories where they will be seen by a massive audience. Even small ads generate significant revenue at Snapchat’s scale. Without ads, Snapchat would have to charge users a monthly fee or subscription, which could drastically reduce its user base.
Keeping the App Free
By monetizing through ads, Snapchat can offer its service for free. This helps attract more users and build engagement. If Snapchat charged a fee, it would lose many casual users who aren’t willing to pay. It would also limit Snapchat’s growth, especially among younger demographics with less disposable income.
Free access has helped Snapchat become one of the world’s largest social media platforms. The app now has over 100 million monthly users in North America alone. Snapchat’s founders want to make the app available to as many people as possible. Ads allow them to do this while still generating the revenue needed to maintain the service.
Ad Formats
Snapchat displays several different ad formats between stories:
- Image and video ads
- Sponsored lenses and filters
- Sponsored geofilters based on location
- Collection ads that showcase multiple products
Advertisers can choose different options based on their campaign goals and budgets. Snapchat provides detailed analytics on ad performance, allowing brands to see impressions, reach, clicks, conversions and ROI.
Targeting Capabilities
Snapchat gives advertisers robust targeting capabilities to reach specific demographics and interests. Brands can target ads based on:
- Age
- Gender
- Location
- Interests and behaviors
- Device type
- Purchase history and intent
Advanced targeting helps ensure ads are relevant to each viewer. This increases engagement and conversion rates for brands.
Ads Can Be Skipped
Snapchat ads last 5-10 seconds and can be skipped after a few seconds. This makes them less intrusive than video ads on some other platforms. Short skippable ads strike a balance between generating revenue and not annoying users.
Some User Frustration
While Snapchat’s ad strategy has clear business benefits, some users still find ads frustrating. The main complaints include:
- Ads interrupt the viewing experience
- Too many ads play in a row
- Ads aren’t relevant
- Full screen ads can’t be skipped quickly
Snapchat has to walk a fine line between satisfying advertisers and keeping users happy. Too many ads could drive people away.
Allowing Influencer Sponsorships
Snapchat now allows influencers and creators to partner with brands and promote sponsored content. However, these partnerships must follow Snapchat’s policies. Clear disclosure is required when content is paid for by an advertiser. Influencer sponsorships provide another way for Snapchat to generate revenue.
The Tradeoff for Users
At the end of the day, Snapchat users accept ads as an unavoidable tradeoff for enjoying a free service. The app provides fun ways to communicate that aren’t possible on other platforms. While ads may occasionally be annoying, many users overlook them in order to use Snapchat’s unique features.
For the majority of users, viewing some ads is worth it to send disappearing Snaps, use fun lenses, build Snapstreaks, and enjoy premium stories. Snapchat has become part of day-to-day life for millions of people. So while they may grumble, most users accept ads as simply part of the Snapchat experience.
Conclusion
Ads are core to Snapchat’s business model. By selling ad space between stories, Snapchat generates significant revenue from brands seeking to reach its large audience. This revenue allows Snapchat to remain free for users. It also enables the app to continue developing fun new features. While ads can sometimes be annoying, most Snapchat users tolerate them as a reasonable price to pay for an otherwise free service.
Ad Format | Details |
---|---|
Image and Video Ads | 5-10 second photo or video ads |
Sponsored Lenses/Filters | Special overlays and effects sponsored by brands |
Sponsored Geofilters | Location-based filters sponsored by advertisers |
Collection Ads | Showcase multiple products in one ad unit |
Targeting Option | Description |
---|---|
Age | Target specific age groups like 13-17, 18-24, etc. |
Gender | Target based on male or female gender |
Location | Target by country, region, city, etc. |
Interests & Behaviors | Target based on interests like ‘fashion’ or behaviors like ‘online shoppers’ |
Device Type | Target Android vs iOS devices |
Purchase History & Intent | Target high-intent buyers based on past purchases and shopping behavior |
User Complaints About Ads
- Interrupt viewing experience
- Too many ads in a row
- Irrelevant ads displayed
- Full screen ads can’t be skipped quickly